Experts say Sudan is once again in economic isolation after the coup

At a strategic road checkpoint in northern Sudan, in Meroe, February 7, 2022 (-/AFP)

After 25 years of embargo, Sudan, one of the world’s poorest countries, was just beginning to see a better future. But the October coup, experts say, plunged it back into economic isolation and exacerbated poverty there.

Babiker Mohammed no longer knows how to feed a family of six on a teacher’s salary: 45 euros.

“Today I spend £27,000 a month on bread, which is 90% of my salary,” he says. “I’m not sure I can continue to pay for school for my children.”

Along with hundreds of teachers, railway workers and other Sudanese, he joined the protesters who are now adding “No Cost of Living” anti-army slogans on a weekly basis.

A strategic road in northern Sudan, at Meroe, is blocked by protesters denouncing
Strategic road in northern Sudan, at Meroe, blocked by demonstrators denouncing “high cost of living”, 7 February 2022 (-/AFP)

And since November, protesters have been blocking an important trade route to Egypt, denouncing in particular rising electricity prices. On top of that, the military authorities have been gradually reducing petrol subsidies: on Wednesday, a liter cost 672 pounds (almost 1.40 euros) against 320 before the coup.

“Right Decision, Wrong Time”

Because the state recently lost 40% of its revenues: in retaliation for the October 25 coup by General Abdel Fattah al-Burhan, the World Bank withheld two billion dollars in aid, and the United States – 700 million.

To make matters worse, Washington, which shipped 300,000 tons of wheat in 2021, will not deliver the 400,000 tons promised in 2022. And this at a time when war is raging in Ukraine after the invasion of Russia, the world’s two main producers of wheat.

On the verge of closing a strategic road in northern Sudan, in Meroe, on February 7, 2022.
At a strategic road checkpoint in northern Sudan, in Meroe, February 7, 2022 (-/AFP)

However, Khartoum claims to have developed a self-sufficient budget for 2022. Powder in the eyes, experts object.

Economist Samia Sayyid told AFP that the country “returned after October 25 to the embargo” imposed in 1993 under dictator Omar al-Bashir, who was ousted in 2019 and accused of supporting “terrorism” by Washington.

It’s as bad a blow as “the loss of oil at South Sudan’s independence” in 2011, adds Mohammed al-Nayir, also an economist.

At the time, Khartoum lost 85% of its €6.8 billion in exports. The currency plummeted and inflation soared to 45%, a rate one can only dream of a decade later, hitting 258% in February.

At a market in Khartoum, Sudan's capital, March 17, 2022
At a market in Khartoum, Sudan’s capital, on March 17, 2022 (ASHRAF SHAZLI/AFP)

In an attempt to raise the bar, the Central Bank announced on March 7 that it would allow the pound to float, which floats freely on the foreign exchange market and is now trading at 660 pounds to one euro.

“This is the right decision, but not the right time,” said Ms Sayid.

She pleads that this should have been done after the fall of Bashir, when funds and opportunities for trade flowed in to “stimulate production” and counterbalance “inflation and devaluation.”

300 employees laid off

But today, the authorities are doing the opposite and “increasing taxes on goods, especially agricultural goods, which puts pressure on production chains.”

According to Mr. Nayir, taxes account for “58% of planned budget revenues.”

Inside a bakery in Khartoum, Sudan's capital, on March 17, 2022.
Inside a bakery in Khartoum, Sudan’s capital, on March 17, 2022 (ASHRAF SHAZLI/AFP)

The factory boss told AFP, on condition of anonymity, that he had to lay off 300 of his employees in a country where one in three residents depend on humanitarian aid.

“They were the breadwinners, but I couldn’t continue with such expensive raw materials and electricity,” he says.

And he is far from alone. Exports fell to 40 million euros in January from 266 million in December, according to Sudanese central bank documents seen by AFP.

As for inflation, Mr. Nayir predicts, it could “go up to 500%.” Because Sudan, whose bowels are full of gold, has few reserves of foreign currency and bullion.

The military authorities urgently appointed a commission led by their number two, General Mohammed Hamdane Daglo, head of the Rapid Support Forces (SSR) paramilitaries.

At a butcher's in Khartoum, Sudan's capital, on March 17, 2022.
At a butcher’s in Khartoum, Sudan’s capital, on March 17, 2022 (ASHRAF SHAZLI/AFP)

But if he never stops denouncing the “mafia” that “trades” in gold or other resources, he is content to assert that “the country has reserves,” never stating the amount.

As for the banks that were supposed to return to the international system after the lifting of US sanctions at the end of 2020, they no longer have “any connection with European or American banks” after the putsch, a director of one of them told AFP.

The UN chief in Khartoum has already warned: “The World Bank is giving Sudan until June” to restart the democratic transition. After that, there will be an end of outstretched hands.

Leave a Comment